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Why Olo views the drive-thru as a barrier

The online ordering company wants to turn more drive-thru transactions to digital ones, which it believes will make fast food even faster.
Checkers drive-thru
Photograph: Shutterstock

Fast-food chains love the drive-thru. The lane that allows for fast, low-contact food delivery became a lifeline during the pandemic and a pillar of many chains’ future plans.

Online ordering provider Olo, on the other hand, sees the traditional drive-thru as something of an impediment.

“The whole premise of Olo’s original proposition of ‘skip the line’ was there shouldn’t just be a serial processing of consumers gated by your being in front of me in line,” Olo CEO Noah Glass said in an interview with Restaurant Business. “The drive-thru is inherently a serial process.” 

According to researcher NPD, 32% of all restaurant transactions came from the drive-thru in the second quarter of 2021, compared to 17% that flowed through digital channels like Olo.

“I’d like to move the needle on that drive-thru number and get some of those drive-thru numbers to turn digital,” Glass said.

The drive-thru is one reason Olo believes that fast food offers the longest runway for its goal of digitizing every transaction in the restaurant industry.

“QSR is the industry segment that I feel like is ripe to come on to digital and on-demand commerce,” Glass said. “For us, largely, QSR is greenfields opportunities.”

He noted that quick service has the largest number of locations and transactions that have yet to turn digital—a big opportunity indeed for the newly public company that generates revenue from every order it touches.

One way it plans to seize that opportunity is in the drive-thru, where it wants to help chains enable mobile-only pickup windows or curbside pickup. It could also use a combination of AI voice recognition and its lesser-known call center product, called Switchboard, to outsource drive-thru orders and have them routed back to the restaurant as if they were online orders, Glass said.

Some chains have started doing this already. Chipotle Mexican Grill’s Chipotlanes, for instance, are only for customers who have ordered ahead online. McDonald’s and Burger King are both exploring AI-based drive-thru ordering. Curbside pickup became popular during the pandemic, and many chains plan to continue offering that option.

“What you enable with a fly-through window or curbside pickup spots … is that you enable parallel order processing and parallel handoff of orders,” Glass said.

For restaurants, that system holds the promise of more transactions as well as more satisfied customers and staff—a key consideration amid the current hiring crunch.

Olo, which initially made its name in the fast-casual space, has recently partnered with a number of fast-food chains, including Culver’s, Krystal, Checkers & Rally's and Jack in the Box, which Glass points to as proof that the company has a place at drive-thru-heavy operations. At Culver’s, for instance, Olo is powering a new order-ahead system playfully dubbed “Curdside Pickup” after one of the chain’s signature items.

And there is no chain too big for Olo’s ambitions, Glass said—even the largest chains in the world that have already made significant investments in digital ordering. Last year, it began working with sandwich giant Subway to integrate digital orders directly into its point of sale.

“We don’t take any chain of any size off of our target market list,” Glass said.

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